Today on the Listing Agent Lifestyle podcast we're going to start a series that I recorded with LJ Lewis from St George, Utah.
LJ, at the time we recorded this was a brand new real estate agent, and we had some great conversations about how to get going and get started as a real estate agent without having to resort to cold calling and traditional prospecting and door knocking. All the soul crushing things we wanted to avoid.
We recorded a series of calls under the umbrella of six months to six figures, focusing on the approach we would take as a new agent, but knowing, everything I've learnt applying real estate marketing for the last 30 years. I think you're really going to enjoy it.
This is episode one of the series we’ll do for the next few weeks and I think if you’re either a brand new agent who’s looking to really get things going or you’re an agent where your business depends on you doing the manual prospecting, there is a lot of actionable ideas here for you.
We really focus on avoiding the things that create that hamster wheel like approach and instead look to do more things that are attractive, and actually get people to call you!
One of the things about everything I do with the Listing Agent Lifestyle approach is this idea that my phone only accepts incoming calls! So I'm looking all the time to figure out how can I get sellers to call me when they're ready to sell? How can I get buyers to call me? How can I get my clients to call me when they've been talking with someone that I should meet and be able to help.
So I think this could be a turning point for you over these next few episodes, and I'm anxious to hear all about your insights and breakthroughs as we're going.
Transcript: Listing Agent Lifestyle Ep045
Dean: LJ Lewis?
LJ: Dean Jackson, good morning.
Dean: How are you?
LJ: I'm good. How are you?
Dean: Well, I am very excited. We're recording a podcast. Look at us.
LJ: Me too.
Dean: Well, I will record a little, have recorded a little bit of intro to set some of the context for people who are joining in on the podcast, but I want to start by setting the context for how we came to be doing this podcast here. I'm looking at this. I've been sharing the idea with people, as like a reality podcast, is really what it is. We're going to be flying without a net here, and work and see, what can we do over the next six months here, to go from zero to 100 real quick?
Why don't you share a little bit about the background of how we got to this point? Then, we'll pick up and map out a plan for taking over St. George, Utah.
LJ: Okay. Sounds good. Well, where should I start? How I became a realtor? How I got in touch with you?
Dean: Yeah, yeah. I think that, both of that. How you became a realtor, how we got in contact here, what could've happened over the last two weeks here.
LJ: Okay. Well, it's been now, probably, what? About five or six weeks since I got my real estate license, and I just, I was originally from the St. George area, but I moved back here about four months ago, because my father was diagnosed with cancer. I came back from Colorado in order to be of support to him. Originally, actually, I think it's interesting how I got in touch with you.
Basically, a list of things to make sure I have it right, so I was originally in real estate for a couple of years, starting in 2008, and didn't do very well personally, because of the economy. Probably, personally, because of myself. Then, I got out of real estate, and I went into carpet cleaning. I got a hold of Joe Polish's information, and I actually used his system for about a year. It worked well, but I really hated carpet cleaning.
I stopped carpet cleaning, and I went and did CrossFit. Of course, through Joe Polish, I started listening to the I Love Marketing podcast, and I've been listening to it off and on for years. Then, when I was actually considering getting back into real estate, I looked up your information. Also, while I was in CrossFit, I used to, I studied Dan Kennedy's information and tried to apply that to my CrossFit business.
LJ: Even through some of the products I had of his, your name always kept coming up, through other trainers and stuff on it. I thought-
Dean: Right. Right.
LJ: "Let me go into real estate. I'm going to get a hold of Dean Jackson and hopefully be able to work with him on some level."
Dean: That's awesome. It's funny, because I've known Joe Polish now for over 20 years, probably 22 years, 23 years, something like that. We started out, we have very similar paths. Joe started out as a carpet cleaner. Then, he started applying and learning marketing to apply to his carpet cleaning business, was able to develop systems that would help him get business, package that into programs, that, he was able to then help other carpet cleaners grow their businesses, and that's-
We actually met through Dan Kennedy. That, Dan Kennedy created in the beginning that, what was called, information marketing world, where we would take information that you had created or applied to your business, and package it, and offer it to other like businesses. While Joe was doing the, applying to his carpet cleaning business, I was doing the same thing in my real estate business.
By the time we got to the point where we were packaging up our knowledge and helping other real estate agents and carpet cleaners, that's when we met. We've been friends ever since. Then, we started the I Love Marketing podcast in 2011. That's still going strong, one of the top marketing podcasts on iTunes. We've had a long history together like that.
There's a lot of lessons like, when you and I talked on our GoGoAgent call maybe a month ago now, it's a couple of days after you got your real estate license. It was like, I thought to myself, "Man, this is the perfect opportunity to really take somebody who's brand-new and really go through the whole process of, what would I do, knowing what I know now, after 28 years of doing this now? What would I do differently, knowing now what I have learned over those 28 years?"
I'm excited to see where we can go with this and what we can do. I think a lot about the, all the things that I've learned over those 28 years, and what things are timeless, because I'm very strategy-based and very, always looking at what's the most effective way to reach the objectives that we have in real estate. What it really comes down to it, the things that we're looking for are, we're looking to get listings. We're looking to get our listings sold and to take advantage of that opportunity that we have. We're looking to find buyers.
We're looking to get referrals from all the people who know us, like us, and trust us. Those are the things that have not changed in 28 years, as long as I've been in real estate. Those things are not really going to go out of style. What's changed is the methods that we can use to reach those goals. I was thinking about it, as I was making some notes for our conversation here, to set the stage. I remembered.
I was looking back that, I got my real estate license on November 22nd, 1988, 11-22-88. I remember the day that I got it, because it's so ingrained in me. Though, I had this, I was in the office of Royal LePage in Halton Hills, in Ontario, just outside of Toronto. Royal LePage was the biggest real estate company in Canada at the time. I'd started out there.
My office manager allowed me to come into the office before I got my official license. You'd have to take all the courses, and then there is a period of time, between when you passed the course and when they actually officially send you your license, so I had passed the course. They had agreed to allow me to come and work there, and he allowed me to come in, get to know the office, and get to meet everybody. I would say, he gave me free reign of his entire real estate training library, which consisted of two books.
There was a book by Daniel Kennedy and the book by Tom Hopkins, which were both about cold calling and prospecting. I read all, I read those books. I read the best wisdom that was available to me at the time. I realized, "Okay. I guess I'm going to have to make some cold calls," and I wasn't thrilled about it, but I wasn't afraid of it either.
I made a decision that, I was going to, because I was young, 22 years old, I thought, "I'll focus on first-time buyers and townhouses," because that's what the people closest to my age were buying. I didn't feel like I should start up at the top. I know differently now, but then, that was my rationale. I chose the townhouses. I started to get to know everything about the townhouses in Georgetown.
There're about 500 townhomes at the time. I decided that, what, since I got my license, I would send out or deliver some evaluation certificates, free evaluation flyers. It was right at the time where prices were really going up, so each sale of townhouses was like setting a new record, and I drew a little graph to show the prices and convincing people, "Now is the time."
The day I got my license, I came back in the office, after the agent inspections of all the new listings, and my license had arrived in the mail. I had all my flyers already ready. I immediately grabbed them, and I went out and started delivering, hand delivering these flyers to the townhouses. I met, in the second townhouse complex that I was in, I met a lady who was taking her groceries in from her car and struck up a conversation with her. She said that she and her husband were looking for a house.
They wanted to move to a detached house, and I told her, "I just saw one this morning on the agent caravan. That sounded exactly like what you're looking for." I described it, told her where it was. That was just the area they were looking in. This was a, it was a situation, what was the lowest priced house on the street, so it was a good street, good price, and she was very excited about it. I arranged, when they got, when her husband got home, to take her over to see the house.
We went at six o'clock. They fell in love with the house, and put in an offer, and got the offer accepted. My very first day in real estate, I got my very first sale from handing out these flyers. I got my first listing, because I listed their townhouse as part of the … It was conditional. They had to sell their townhouse to get the detached house. I had delivered the flyers. Then, I delivered the just-listed flyers to the … The second day of my license, I'm out delivering now just-listed flyers to these townhouses, and I delivered them to the other real estate offices in town.
As I walked into the RE/MAX office, Doug Meal was standing there. I handed him one of the flyers. He goes, "I've got somebody for that," because it was really a hot market. As soon as things were coming on, they were selling. He called up his clients, took them over to see the townhouse, and they bought it. They were first-time buyers, bought it that night.
Two days in, I've got my first sale, my first listing, my first listing sold, and while I was delivering the just-listed flyers, I got a call from another townhouse complex, from a Vietnamese couple. Their son called. They didn't really speak English, but their son called, and they wanted to sell their townhouse, so I went over and listed that.
All this in your first week in real estate, it was all pretty exciting. I thought, "Wow. This is going to be great," because you go from having nothing to, all of a sudden, it's like, "Bang, bang, bang," things are happening.
Dean: It was a cool thing. Then, I started making, at the same time, my cold calls. I decided, I wasn't going to just call people up and, "Hey, are you ready to sell your house?" thing. I decided to do a survey, and I just rationalized to myself that I was only, I was going to call everybody in town one time, and then I would record whether they had any interest in selling their house, whether it was now or in the future. Then, I would only need to build a relationship with the people who were actual prospects, so I could-
I mean, it's so funny how you make enough of these calls, that you, I'm so ingrained in me, "I could pick it up and do it again right now." I would call people up, I'd say, "Hey, Mr. Lewis. It's Dean Jackson calling from Royal LePage. We're in town. We're doing a quick area market survey, and I wonder if you have just a minute to be included?" People would say, "No. I'm busy," or they'd say, "Yes," but if they said no, I'd say, "You know what? It's just five questions. It'll take one minute. I promise."
Most people would be okay with that. Then, I would go through and just ask them, "Have you lived in Georgetown for more than five years? How many years in your current house? Where did you live before you moved to Georgetown? How did you happen to choose Georgetown?" That's the first open-ended question there. Then, I would ask them, "If you were to move, would you stay within Georgetown, or would you move out of the area?" Then, the last question was, "When would that be?"
That was the whole survey, right? I would do these five questions, and I would find people who would say anything from, "We're ready right now." That was Mr. De'ath. I called, I got to a name, I decided I'd start in the D's instead of the A's, because I thought everybody was cold calling, right? I want to just go on top of anybody, so I decided to start in the D's.
It's so funny, because all of the first transactions that I did from this were all Davis, De'ath, Draper, Duncan, all D prospects. I called up, I came across this name, D-E-'-A-T-H, so it looked like death, right? I wasn't going to skip anybody. I would, just thought, "Okay, De'ath. That's how I'm going to say it." It was right. A good guess.
I called him up, an English guy, and went through the survey, and he goes, "Well, we're ready right now if we could find the right house," right? I went over to see him, and listed his house, and took him out to start looking at homes. It was really like, all of these things, right out of the gate, were working, firing on all cylinders, right? Then, I got to a point where the cold calling became more and more like a hamster wheel. I had that realization.
That, it was not building any legs. It was not working when I wasn't working, and so I would … All this, as you get busy, the temptation is to want to put that stuff aside and service your listings or work with the buyers that you're working with. It became easy to delay making those calls, so I had to start playing games with myself, to get myself to make those calls.
I remember thinking, "Okay. I need to …" I was committed to making 100 calls a day, and that took about three and a half hours to do that. I would call from 10 in the morning until noon. Then, I would call from 6:30 until eight o'clock. That was always the best times to make those calls.
It was really soul crushing in a lot of ways. You get to put on a good front, but you'd always get, some people would yell at you. Some people would hang up at you, on you. Some people would just talk your ear off, so you either … It was always, it became really mechanical. I was really realizing, "Man, when I'm not doing this, if I go for a week or a couple of weeks of not doing this, I was setting myself up for all this spectacle situation in my business."
I was looking for, "How could I create something that works when I'm not working?" At that time, I read a book called the E-Myth by Michael Gerber. Have you read that book yet?
LJ: Yes, I have.
Dean: You Know, that's great, that you got a little bit of a head start there, that Michael's idea was to create something that works on its own, a creative business that works. He had a great concept of working on your business, instead of in your business. The cold calling and stuff was working in it. Working on your business is working on something that can work while you're not working, and to imagine that you're creating a business that that you can duplicate 5,000 times.
That was just a very impactful concept to me. I got that on a really deep level. I started putting things together. I started really applying myself to creating things that could replace my cold calling. Now, by that time, I had hired other people to do the cold calling for me, so I had partnered to grow that way, but even that was still people-dependent.
I started experimenting and learning direct response marketing. That's when I met Dan Kennedy, and Jay Abraham, and Gary Halbert. Once your eyes are opened to the direct response world, that you can put words on paper, and get people to respond, and use salesmanship multiplied by sending out postcards or running an ad, that is a big step in the evolution of any small business person.
I put together these postcards. At Royal LePage, we had a guide for first-time homebuyers. I put together these postcards to mail to apartment complexes that had a business reply card on them. This was probably 1990 by now, and that would've been two years or so of doing all the things that I was doing. That's when the lightbulb started coming on.
At that time, of course, there's no internet. You can't send people to a website to get something. The state-of-the-art was a business reply card, where somebody could fill in their address and just drop the card in the mail. I sent out these postcards to apartment buildings.
I remember driving into my office. We had an office with a glass front, so you could see into the reception area. Joanne was the receptionist. I remember pulling in, and Joanne was holding something over her head and waving it, and I walked in. I didn't know what it was, but she handed to me, presented to me really, this little stack of these business reply cards with a rubber band around them, and I just remember.
I mean, I get that feeling, right now, LJ, like this whole sense of, "Wow. This is amazing." There was 11 of these cards the first day that I got the responses, right? I started just looking through them and thinking, "Wow, this is really … This is something here," right? All these people had filled in their name, and their phone number, and their address.
I went into my office, and I started calling these people, instead of making the cold calls. I got to talk to six of the 11 people that day. Every one of them was a real prospect. I mean, they were friendly. They knew who I, what I was calling about. They wanted the book. They were thinking about buying a home, and I would've had to call all week to find six people who were that friendly and that interested in finding a house.
I was hooked from then. I mean, I got … That was the day that I knew that I would never have to make another cold call again. Because, I knew that, now, I can get people to call me. I can just send these postcards, and people will raise their hand, and so, "Wow," it was really like a life-changing thing.
Then, I went on to start developing all these direct response tools like using … I created a guide to Halton Hills, where I put together pictures of the house styles that were available in Halton Hills. I had a lady in my office, who had been in real estate for 25 years, and she was retiring, and she gave to me a big box with all of the floor plans and the sales materials for all of the developments that had happened in Georgetown in her time there.
All the homes that were 20 years old at the time were all new developments at one point. She had all of the floor plans and the names of the models and all that. I started to realize, "Wow. This is like …" If I take a map of Georgetown and I overlay on where these developments are, there were certain builders that would build six or 12 models of a specific home in a specific neighborhood. I realized, "Wow. It's true. There's really only a few different models in this neighborhood, and then there's a few more over here."
If I just took pictures that represented what these house styles were, I could give somebody a pretty good overview of what's available in Halton Hills, where they could know what to get for their money. That's where … Halton Hills is an area where, like Connecticut is to New York, people would work in the city, live in Connecticut. Same thing in Halton Hills, they work in Toronto and live in Halton Hills, but nobody-
First thing that people want to know, when they're moving to a new area, is, "What can I get for my money, or what's available?" I put together the guide to Halton Hills real estate prices. That ad, I put an ad in the homes magazines that were for the greater Toronto area and in the newspaper, and people would call to get the guide, or they'd fill out, I had a coupon in the ad where they could put their name and information and either fax it or mail it in, so, every day, people were mailing in, or faxing in, or calling in, to get a copy of the guide to Halton Hills.
I tell you that story, because there's the seed of everything that I've done going forward has come from that. We still, to this day, use the guides as a way to attract people who are coming to an area from out of town. I wanted to set the stage for that, because a lot of the things that I'm going to share with you, about what I would do in St. George, are going to be based in the seed of something that started almost 30 years ago now.
That, they're still, psychologically, what drives the success of them, is still the same. That's the things. When you start doing principle-based things, they start, you start to realize, some things are timeless. I mean, I've heard recently, Jeff Bezos, the guy that owns Amazon, talk about how people always ask him, "What's going to change in the next 10 years?" Right? Like, "What's happening?" As if he has got his finger on the pulse of the future thing.
He said, "I don't know what technology is going to change in the next 10 years, or what's even going to be available," but he said, "I know for sure, nobody ever asks me what's not going to change in the next 10 years, because that's what we're building the company around." He said, "I know that 10 years from now, people are going to want to get as wide a selection of products as they can get. They're going to want to get them at the lowest price they can get them, and they're going to want to get them as fast as they can. Everything that we're doing is about driving those three things."
Just like 30 years ago, the thing that a homebuyer wants to know, when they're starting the process, is, they want to know, "Well, what can I get for my money? What's available?" That's not going to change. It's just that the avenues that we have to reach people now, with the internet, with Facebook, with social media, with all of these things, are really creating new opportunities and will continue to grow. We've got the baseline principle of giving people what they want to educate themselves and start that process.
I'm excited to take all of that learning, and move forward, applying it from, with new eyes now, take advantage of all the tools that we have available here. That was a lot of words to set the stage. I think it's important that it gets us uprooted in this, of where it is. Literally, I've been doing this for 30 years. I'm 100% confident that we're going to get you to where you want to go, but I'm curious, what is the popular wisdom right now, about, what advice are people giving you, or what approach are people suggesting for you to take right now as a newly licensed realtor in St. George? What are people saying to you?
LJ: Yeah. Well, it's interesting you asked that, because when I was listening to your story there, in the past, I actually … When I was quite a bit younger, I've done telemarketing. I've done door-to-door sales, and I was successful doing them, but I don't want to do that. Of course, going into my real estate office here, that is what is strongly encouraged, and there's training around. It's basically the, "Call for sell my own, or as call expires, go ahead and farm an area, but go door knock."
As I've told you before, I have another business. I have an income. My feelings in, and actually, my reason in getting into, back into real estate, is, I'm not interested in doing that, nor do I have to do that, because-
LJ: … I do have an income. If I have to do that, in order to be successful, I'm going to go find something else to do.
LJ: It doesn't fit the lifestyle that I want.
Dean: Yeah. That's why I've been coming up with a unified description of what we're trying to accomplish here. I think that the great words that I'm really attracted to are, "Listing Agent Lifestyle." That's what we're looking for here, is to-
Dean: … create a business that is, that provides a lifestyle, that you're not doing things that you don't feel good. I don't think anybody likes making cold calls or prospecting like that, and you really don't have to. That's the message that I want people to understand, is to, following our journey here that, if we're going to do this without making a single cold call, and we're going to do this without making a single prospecting outbound call. I'm talking about, my provocation, when I create all the tools that I create now, is that, to imagine that my phone only accepts incoming calls, that I can't make any outgoing calls.
Let's start with that. Now, with texting and e-mail and stuff, dialing out to people is the last thing that you need to be able to do. I know that people are going to take that with some skepticism, but hopeful skepticism. I think people are going to hope that that's true, but deep down, because it's so ingrained, that you got to hit your prospecting numbers, and you got to make this many calls.
I used to have, play those same games with myself too, right? Even Tom Hopkins, way back then, would say, "Imagine that you got 100 pennies, and your goal is just to move the pennies into the next jar, right? Every no is getting you closer to a yes and figure out what ever each no is worth to you." All these things are motivating, but they're not that, it's not as exciting as sending out a postcard, or running an ad, or putting out an info box flyer. Have them people call you. That's all is the more exciting thing, so I'm excited to move on that.
You and I have had some conversations on our GoGoAgent calls, about the idea of narrowing our focus, picking a specific target audience for starting the process here. You had mentioned that, there are golf course communities in St. George, that would be a good, that's, they're desirable, would be a good target audience. Why don't you remind me about what you have found out so far, about the golf course communities?
LJ: Sure. There are about 10 golf course communities in the area. They range from, some of them in the lower-priced ones, somewhere between 200,000 and 500,000, up to one or two that have million-dollar homes in them. The ones with the 200,000 to 500,000 are larger communities, with at least, two of them that I've checked out have over a thousand homes. There's a few of them that are smaller, with a few hundred homes. Anyway, that's pretty much it so far.
Dean: Yeah. I'm excited about this as our target audience here as a start, combined with, looking for, getting referrals from the people who already know you, like you, and trust you. That is where I always want to start with people. If I, just so for people listening, I can just set a context for us, is that, we take an approach of dividing your business into three distinct units of your business. We call them, the before unit, the during unit, and the after unit.
The purpose of the before unit is to find people who want to buy or sell a home, and deliver them to your during unit, which is the unit of your business that helps people buy and sell homes. From the moment they say, "Hey, I'd like you to help me find a home," til the moment they move in and get that transition into the 30, 60, 90 days after closing. That's all the during unit of your business. Same thing when somebody says, "I want you to help me sell my house." That starts the clock on your during unit until they got that house sold, and the transition 30, 60, 90 days after the closing.
Then, the after unit is all about nurturing lifetime relationships with the people you who've already done business with, and the people who already your relationships, the people who know you, like you and trust you. Your relationship portfolio, we call it. What we look for in your after unit is to nurture lifetime relationships and orchestrate referrals.
For everybody I always start with the after unit because it's the easiest thing to get going, and it's the easiest thing to … It's one of the most profitable things that you can do. Like right now, I mentioned to you on one of our earlier calls, I encouraged you to get your list of 100 people who you would recognize by name if you saw them at the grocery store, and you'd stop and have a conversation with them. How many of those people did we end up that you recognized?
LJ: I'd been able to come up with just under 100, about 96, I think.
Dean: Okay, 96 people, so perfect. We've got that group of people here now. That starting point is going to be where we will begin the journey here. We want to set this up so that we get all of those people into your GoGoAgent CRM into your database so that we can send a postcard to them every month. Have you got people already set up in there, or is that where we are right now that we need to kind of get them off paper and into the database?
LJ: Yeah. I need to get them into the database, and I need to continue collecting … I guess one of the hard things … Back in the day, when everybody was in the phonebook, it was pretty easy to find people's contact information, but I have a name of like I don't know, I don't have their number, and I don't have their address, so anyway.
Dean: Well, and part of it now that there's … Diane can help you with getting this set up, too, but mostly online we can do things like that, help finding the addresses through the online white pages or tax records or whatever it is. Most of the time people know the name of who they are and the general area that they live in. If you know somebody's name and that they live in St George and you know the general area where they are, or you may know the street, that information we can get the mailing address for them.
Dean: That sort of process is the most time consuming part of it, right. Because it feels like there's a little bit of don't know where to start there, but if you've got-
LJ: It hasn't happened yet.
Dean: I got it, so if you got the name and you've got the … That they do live in St George and maybe if you know the street or whatever, we'll be able to find out that information and get them set up so that this is one of those things that it's like launching a rocket or a satellite into orbit. This is one of those things that you have to do one time to get it set up, but then we'll be able to set it and forget it where every month we'll be able to, with a click of a button, just be able to mail a postcard to those people as baseline.
That, when we look at it, the thing that we try and accomplish in the after unit, is to get to a point where we are getting a, what we call, return on relationship of 20%, so we treat it. A lot of the things that you'll hear, we talk about them as an asset. We talk about your relationship portfolio like it's a financial asset. Because it really is. These 100 people, these will be the people that you would hope would consider you to be their realtor if they ever needed a realtor, right. That's the thing because they have a relationship with you.
Our intention is that by being in front of these people every month that you'd be in conversation with them, they'll have a contact from you, and some portion of them may have a real estate need themselves over the next 12 months. It's a really high-probability group. When you think about that, that they're, in the cost of it, if you look at 100 … You have the 100 people and let's just, for round number, say it's $100 a month to mail the postcards that you're … You've got a $1,200 investment in a group of people who know you, like you and trust you and you would hope would consider you to be their real estate agent.
Now, what's the average sales price in St George? What will be the average commission that you would get for one side of a transaction?
LJ: The average sale price is about 230,000 so 3% is what about … It runs about $6,500 or $6,200.
Dean: Okay, so let's just call it $6,000, right. That when we look at that that your average is going to be about $6,000 for one transaction that it seems to go that of the $1,200 investment there's a super high probability that one of those people is going to do a real estate transaction in the next 12 months. That's just statistically super high probability, right. Now, you've got that in front of them because … Especially in you first year, so you're not in contact with people who know you. They may not realize that you're in real estate until it's too late. When then you run into them six months from now, they say, "We just bought a house. I wished we had known that you were in real estate. We totally would have worked with you."
Dean: We don't want that to ever happen, and we know that for most people starting out in real estate, that's where your business comes from mostly. It's your friends and your family or the people that you know that end up buying a house. They feel really comfortable that finally now they've got somebody they know that they can work with. That's a much better experience than going to somebody they don't know, but that's just the first kind of layer of what happens in the after unit.
We've got those 100 people and really high probability that some of them are going to have a real estate need over the next 12 months, but what we also realize is that those 100 people are going to be in conversation with other people who are thinking about buying or selling, right. They know people who are going to be thinking of buying or selling in the next 12 months, and so we want to orchestrate referrals from that group, and so there is a whole psychology that goes on here.
I've got a whole report on the secret psychology of why people choose or refer real estate agents, and how to be the only one they refer, but I'd give you the basic premise of it here because this is phase one. That right now we know that there are conversations going on all the time. That people are talking about buying or selling and those conversations largely go unnoticed by people, right. They don't consciously notice that or make any kind of connection that, "Whenever I hear a conversation about real estate that triggers the thought of LJ."
That's not happening naturally, and so when we look at it, we have to kind of understand why people refer in the first place. The misconception the people have and sometimes the block that they have with trying to get referrals is that they feel like they're asking people to do them a favor by referring, right. "Do me a favor whenever you hear somebody tell them about me." All of those kind of things feel like … That feels a little uncomfortable, right. Most people have that you don't feel good about trying to turn your friends into salespeople.
That's not it at all, and the whole premise of it is faulty in that that's not the reason that people refer anyway. Nobody is referring anybody as a favor to you. The only reason and the real reason that people refer anything is because it makes them feel good. We have evidence of this all the time when you think about the things that we do on a daily basis. If we are conversation with somebody and we are talking about movies or books or restaurants we constantly want to introduce good things to people, right.
If you tried this new great restaurant, you want to tell people about it, and we do it because it makes us feel good when they go and try that restaurant and have a good experience, and so much so that if you have a conversation like that with somebody and you tell them about a new restaurant or a new movie or a new TV show to binge watch, whatever it is, and I use these examples because we are so familiar with them, but when you have the next conversation with that person, subconsciously you're kind of waiting for the acknowledgement.
You're waiting for them to say, "I tried taking TV show, it was so good, or I read that book," and if they don't, we'll often prompt it, "Hey, did you read that book, or did you go see that movie, or did you try that restaurant?" Then, when they do say, "It was so good," we get these squirts of dopamine and our chest puffs up and then gets these waves of good vibes because we brought that good thing into their life, and in that moment it raises our status in the herd.
That sounds so freaky but it's so true about what's actually happening on a DNA evolutionary psychology level. We are still largely a herd society, and so if there ever came a time where we had to call the herd we are always conscious of providing value to the herd so they don't get rid of us. It's the way they knit into the fabric of our society.
When you understand that, instead of asking for referrals, we are reframing what we are doing from our own perspective as giving people an opportunity to feel good, and it always feels better to … There's no block in that. There's no block in giving people an opportunity to feel good. When we understand that that's reason that they are referring, now we can look at the mechanics of how referrals actually happen.
All referrals happen as a result of conversation, and three things have to take place. When they hear a conversation, they have to notice that the conversation is about real estate. They have to think about you, and they have to introduce you to that person. That's how a referral takes place.
Now, so often these conversations are going on and you think about the conversation possibility. You got the conversation of somebody talking about buying their first home, or somebody talking about relocating or getting a bigger home or building a home or moving to a golf course or retiring or their kids going to college or buying an investment home or a vacation home.
There's lots of these conversations that are overtly about real estate that your top 100 are very, very likely to be having today. Some of that conversation is about that, and so what we want to do is raise the instances that when they hear those conversations they think about you. Because if we can get them to think about you, then there's a higher chance that they're going to tell you about these people that they've had this conversation with, so that you can get in conversation with them.
I'm making a big distinction that it's not about telling your top 100 to tell other people about you. That's not what it's about. We are not saying, "Hey, make sure you tell all your friends about me that I can help them." We are now, because we know that the reason that they refer anything is to feel good, looking for opportunities that we can let them be the star.
I've come up with a formula for this, for being able to use this psychology to make it a higher incidence that people will refer you, and so we look at the opportunity and say, "To give somebody something that they can give to their friend." Rather than saying, "Hey, tell your friend about me," we want to say, "Give me a call, or text me, and I'll give you this to give to them."
The formula is basically we deliver on the back of a postcard, and I've got these postcards called the world's most interesting postcard and it's like a newsletter format on a postcard and on the front side there's all kinds of interesting facts and it's a fun-looking postcard, and then on the back, we've got a post-it note style that has a place where we can write a custom note to people, and each month we pick one of these high-probability conversations, and presence that in people's mind.
We'll send out a card that might say, "Hi, LJ, just a quick note in case you hear someone talking about buying their first home this month now back to, as we are moving into the fall, this is the time where a lot of people maybe want to get a house before the end of the year. If you hear someone talking about buying their first house, give me a call, or text me, and I'll give you a copy of my book for some home buyers that you can give them. It's got all kinds of tips on the home buying process that will help them out."
That is the formula here, right. The just a quick note in case you hear someone talking about whatever the high-probability conversation is. "If you hear someone, give me a call, or text me, and I'll give you a copy of this to give to them", so that we are letting them be the star. It's not saying, "Tell them I can help them." We just want to raise the chances that when somebody hears those conversations that they think about you and they contact you because it's always easier for somebody who already knows you and likes you to contact you than it is for them to tell somebody else to contact you. Does that make sense?
LJ: Yeah. It makes a lot of sense and it sounds like a much nicer way to do it. I've never, like I say, in my CrossFit business, I tried a number of different ways to get referrals but like I say, a lot of them, especially you're always taught, right when you first sell something, they immediately ask for referrals and-
LJ: I always felt like I didn't even know if I'd do a good job.
LJ: It just didn't seem like it really made sense.
Dean: I get it, and you're absolutely right that so often I do those strategies where … People are in tune with you know that that didn't feel right, right, but you maybe would do it, but you didn't feel like … You felt a twinge that this is not really who I am. I don't want to pounce on people and ask them for referrals.
Dean: That's a different kind of thing, but when you totally buy into this idea that the reason people refer is because it makes them feel good and it happens as a result of being in conversation, now you start looking for opportunities that you can help your top 100 feel good by helping their top 100, the people that they are most in conversation with.
You'll see, we'll get this going and as we do our updates here we'll kind of track what's happening as we do this, but it is very … I think it's a very important thing to realize that the psychology of this is going to keep you on their mind and they're definitely going to notice conversations about real estate because your each month presents a different conversation.
Now, what I learned in six years of doing this world's most interesting postcard and we see that happen where just adding the postcard makes people's referrals go way up. I started here in Winter Haven with Julie Matthews who'd been in real estate for over 20 years, but each year her whole … She has her top 150, each year she would send in December a magnet calendar that would go on people's fridge and that was the extent of the communication that she had with people, right.
Everybody in December got the calendar, the magnet calendar, and that was it, and she would get 10, 12, 13 referral and repeat transactions every year. That would be a great thing. The first year we added it she went from 13 repeat and referral transactions from her top 150. 33 transactions with the only change that we started sending the postcard. That's with somebody doing nothing really, or one annual thing to adding this and almost tripling the number of referrals.
Then, Chuck Charlton who I've mentioned to you in one of our GoGoAgent calls has a very advanced sort of after unit. With their top 150, they were sending a monthly newsletter and a letter from the heart and doing client events and all of these things but had done 19, 21, 20 transactions from their top 150, and then we added the world's most interesting postcard and they went to 31, 33, 34 and now they're over 40 transactions a year from their after unit.
Setting the stage here, this is the piece that we want to lock in and get kind of in orbit because that will be working in background while we now start working on creating your guide to the golf course community. You start doing all the before unit strategies. Yeah. The thing that I want kind of put out there, too, about the after unit. The postcard, the way that it works is that what I've observed over six years of doing this is that it's very rarely as overt as somebody getting the postcard, calling you up and say, "Hey, I got your postcard and I just heard somebody talking about buying their first home. Can you give me that book to give them?"
It's very rarely that it's as overt as that specific thing, but after we mail two or three of these it's like they start to notice the adjacencies of that. If we suggest to somebody that just a quick note in case you hear someone talking about buying their first home, that's like saying to somebody, "Hey, let me know if you see a pink elephant." Because now if you go out in the street and I suggest that to you, "Let me know if you see any pink elephants.
Give me a call or text me," and you're out three weeks later and you see a blue elephant, you're still going to think of me because it's so close to what I just asked you about, right, or even if you see a pink giraffe you might call me up and ask me about that. You start to presence it that people automatically notice that the conversations are about real estate. They automatically think of you, and they just start telling people about you anyway, or starting to tell you about them because it's such a close match.
It's magic the way it works. It really is like a really cool kind of said it and forget it kind of multiplier that we can use, and all looking for what can we do in your first year here. How can we go from zero to whatever percentage of your business over the next 12 months coming from those 100 people, and ultimately building up your list to 150 because we are going to be paying attention to the people that you meet over the next 12 months as well.
LJ: Okay. Is there a reason that you always say up to 150. I mean, why wouldn't you continue-
Dean: Here's the thing. That's a great question, but there's a guy from Oxford University, Robin Dunbar who is an evolutionary psychologist and he has come up with this idea and Facebook has confirmed this. That the average number of friends that people have on Facebook is 150 for most people, and that's very consistent. That 150 is the number of relationships that we are wired to be able to manage.
We can recognize more than 150 people but we basically have 150 relationships, and so when you start to think about it, even if you've got 1,000 Facebook friends or a list of names that there's really … When you think about that test for it that you would recognize by name and you'd stop and have a conversation with if you saw them at the grocery store, that is the closer thing here. That's where you are really going to get to a point where we want to manage those relationships. If you wouldn't recognize them by name, or stop and have a conversation with them, odds are that they are not thinking about you that much.
LJ: That makes sense.
Dean: Yeah. When you look at that, that's really where we are going there and it's just such a manageable number. If you just did a quick YouTube search on Robin Dunbar, there's a couple of talks that he has done that show … That explained the evolutionary psychology of that. That most herds or tribes or things like that generally are about 150 people, and when they get bigger than that, they kind of split off into two groups.
Dean: Yeah, so I think that's the big thing there. I think that step one of this is going to be let's get your top 100 into GoGoAgent, let's get their addresses and everything all set up so that we can send out the first postcard as soon as we can. Then, we can start moving onto setting up your approaching the before unit here with our golf course communities, and we will pick up from there with our next conversation.
LJ: Okay. That sounds great.
Dean: Yeah. I'm very excited. I think this is going to be a fantastic thing, LJ. I appreciate being able to go on this journey with you. I think it's going to be really great for everybody to kind of watch and it's exciting, as if doing exactly what I would do if I was relocating to St. George. Let's see how high we can take this.
LJ: Well, I feel fortunate to be at the right place at the right time. Thank you very much.
Dean: Okay, LJ. Thanks. I'll get Diane to connect with you, too, and we can help you get the top 100 in there.
LJ: All right. Excellent. Have a good one, Dean.
Dean: Thanks and bye-bye.
Dean: Well, there we go. That was a great episode. I loved that conversation. I re-listened and was having the reminders of the kind of things that we talked about and it's really fun to relive the first few months of my own real estate career knowing now what I would do differently having all this knowledge and experience and assets of already figured out direct response things that I have in my toolkit to use, and so I hope you enjoyed that first episode and we'll continue on with the rest of the podcast in this series.
Let me know how it's going for you, what your insights are here. I'd love it if you would come over and join us over at gogoagent.com. You can come on in and take part in all of this, see all the tools that we talked about, all the done for you marketing things that you literally just have to deploy and start getting results right away. Gogoagent.com, 100% free, no credit card required trial, or you can come on in and take a look around. The best way for me to explain it to you is to let you see it and experience and try it for yourself so come on over, gogoagent.com and I will be back and we'll talk next week. Bye.